Nonfarm business productivity dropped at a 0.9% annual rate in the April to June period, the Labor Department said Tuesday. It was the first decline since the fourth quarter of 2008, when productivity fell by 0.1%. Economists polled by Dow Jones Newswires were expecting productivity to rise by 0.3% in the second quarter.

Unit labor costs--a key gauge of where prices are heading--increased at a 0.2% annual rate last quarter, less than the 0.5% gain economists had forecast.

Investors barely waded into the market on Monday as many stepped aside after Friday's disappointing jobs report to see whether the central bank will take further stimulus measures. The Federal Open Market Committee is meeting today to decide on interest rate and monetary policy.

Recent data have indicated that the U.S. economic recovery is slowing, raising worries over the potential for a so-called double-dip recession. While the data spurred some hopes the Fed will consider restarting its purchases of mortgage-backed securities or Treasury bonds, the central bank may resist the pressure to act. It could also adjust the language of its statement to reflect awareness of the economic uncertainty.

The Bank of Japan left its policy interest rate and economic outlook unchanged.

Among stocks in focus, bond insurer MBIA rallied 7.6% in premarket trading. The company said late Monday that its second-quarter net profit rose to $1.3 billion, or $6.32 a share, from $895 million, or $4.30 a share, in the same period a year ago.

Intel slipped 1.1% after J.P. Morgan cut its calendar 2010 estimates on Intel after the firm's checks in Taiwan "indicate order rates from the PC end market deteriorated sharply" during the last part of July.

Commodity prices tracked equities lower. Crude-oil futures fell below $80 a barrel, while gold futures also declined. The dollar, meanwhile, gained against most of its major rivals. The dollar index rose 0.8%. The euro was trading recently at $1.3130, down from $1.3225 late Monday in New York.

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